‘GDP growth over 8% sustainable’

PTIMay 31, 2006, 05.40pm IST

NEW DELHI: Stock markets might be tumbling like nine pins but India's policy planners feel the crash on the bourses is just in line with global trends and the economy is not overheated, as all macro indicators remain strong."There is no evidence to say the economy is overheated... all macro indicators are in reasonably okay shape," Planning Commission Deputy Chairman Montek Singh Ahluwalia said when asked whether the 8.4 per cent GDP growth in 2005-06 pointed towards overheating in the India economy.GDP growth can be sustained at more than 8 per cent level during the 11th plan period of 2007-12, he said.But reports of a robust 8.4 per cent GDP growth during 2005-06, higher than earlier estimates of 8.1 per cent, failed to have any positive impact on stock markets. The country's benchmark index BSE Sensex nosedived by more than 600 points due to heavy selling by foreign funds."Global markets are down and it is partly reflected on Indian markets also," Finance Minister P Chidambaram said.Although overall GDP growth figures are high, both Chidambaram and Ahluwalia expressed disappointment with the performance in mining and electricity and stressed on speeding up reforms in the two sectors for higher growth rate.However, both the top policy makers cautioned against the impact of rising international oil prices on the economy, if it was passed on to domestic consumers.An oil price hike in the country would definitely push up inflation, although the Finance Minister said that it might not affect growth rate if manufacturers and service providers could absorb rise in costs and still sell their goods.